1% Mortgage Loans-What's The Catch?

While there are several different types of 1% mortgage loans, there are really only two major keys to winning with a 1% mortgage loan.

The first key is to make sure the loan is set up correctly from the beginning.

And the second is to make sure you are using the loan correctly to gain the most benefit.

First, let's talk about how the loan works. Then we'll get into how to set the loan up correctly so you can reap the financial rewards these mortgage loans have to offer.



To start with, 1% mortgage loans have payment options. Each month when you get your mortgage statement you will have the option to make a 30 year fixed payment, a 15 year fixed payment, an interest only payment and a minimum payment at 1%.

Although you are given several payment options, you should only select the 1% minimum payment.

Why?

Because if you wanted to make a 30 year fixed, 15 year fixed, or interest only payment, you would be better off getting that type of loan.



Typically, these payments are higher with a payment option mortgage loan.

If you select the 1% minimum payment your first benefit will be a significant monthly payment reduction. Your mortgage payment will likely be cut in half. Of course, this is a pretty attractive first benefit for most home owners.

To compound the effectiveness of selecting the 1% minimum payment you should save what you save. For instance, let's say you refinanced your home with a 1% mortgage loan, paid off all your credit cards, and reduced your monthly payment by $1,000 a month.



Now, if you save that $1,000 a month for yourself instead of giving it to your creditors, you will have $60,000 in cash at the end of five years - And that's with a zero percent return.

Here's the second benefit to selecting the 1% minimum payment option:

Tax savings.

If you make an interest only payment your mortgage balance will stay the same. If you make a 1% minimum payment you are actually paying less than interest only. Therefore, you are creating deferred interest which makes your mortgage balance increase each month.



Before you freak out, keep in mind that deferred interest is mortgage interest and is therefore tax deductible.

Let's say your home is going up in value $2,000 a month. The 1% mortgage loan will allow you to take a small piece of that appreciation, say $500 a month, and turn it into a tax deduction.

So you are taking a small piece of your equity each month and turning it into a tax deduction. If you did not do this, all of your appreciation would be locked up in equity.



Equity is terrific and is certainly one of the many benefits to home ownership. But investing in equity will get you a zero percent return.

No one is going to cut you a check each month for the equity in your home. As a matter of fact, if you wanted to get the equity out of your home you would have to sell your home or get a loan. And you better qualify or you will not be able to get a loan.

So why not take a small piece of your equity each month, turn it into a tax deduction, and at the same time save $1,000 a month for your self? You will still have plenty of equity but with a 1% mortgage loan you will have cash AND equity.



If you do this for any length of time you will come out way further ahead financially than if you did a regular 30 year fixed or an interest only mortgage loan.

By the way, if the deferred interest is a concern, try making bi-weekly payments. Making a bi-weekly payment will reduce, and in some cases eliminate the deferred interest all together. Which means your mortgage balance would not increase.

How to set the loan up correctly:

1) The 1% payment option on these loans is only available for the first five years.



But you could actually keep one of these loans for 30 or 40 years. If you select a 40 year loan your monthly payment will be lower but the payment options will not last for five years. The name of the game is to keep the 1% payment for as long as possible. So get a 30 year amortization.

2) The 30 year, 15 year and interest only payments are tied to an index. Select a slower moving index like the MTA (Monthly Treasury Average) instead of a faster moving index like the Libor (London Inter-Bank Offered Rate).



So how can you lose with a 1% mortgage loan?

Answer- depreciation.

If homes in your area are rapidly going down in value, deferred interest could cause you to become upside down in the home.

But if your area is experiencing a 3% to 5% rate of appreciation and you save what you save by making the minimum payment, a 1% mortgage loan can have an incredibly positive impact on your financial future.

Hartley Pinn has recently created the Mortgage Leads Generator Training Course to teach people how to make over $50,000 a month working part-time (10 to 15 hrs per week) as a mortgage loan officer.

Mortgage Lead Generation

The Internet has changed the way people evaluate, compare and choose Internet mortgage lead services. Each day more and more mortgage consumers use the Internet to study and purchase mortgage loans and mortgage refinancing. As a result of this Internet mortgage leads thousands of mortgage seekers fill out forms on thousands of Internet mortgage lead generation websites requesting mortgage loans from mortgage lenders.



These Internet mortgage leads are made available to you by an array of internet mortgage lead generators. The big question is: are internet mortgage leads worth of effort and cost? It will be worth when you choose quality Internet mortgage lead which is a lead that closes!



Exclusive Internet Mortgage Leads are a boon to all those in the Mortgage Industry today and could be purchased online! This is a new technique in the mortgage industry to offer mortgage loans to the needy.



These internet mortgage leads are seen to have given freedom and flexibility to consumers, mortgage leads and mortgage lenders. All that the consumer is expected to do is to search for "internet leads". Search engines will list many accredited Internet mortgage lead providers at a click!



Hence in general, websites of Internet mortgage lead providers bring the mortgage consumers, mortgage leads and mortgage lenders under 'one roof'.



So, the mortgage consumers will fill up the online loan request forms. This information provided by the mortgage consumer will be sorted out by the internet mortgage lead generators and will be distributed to the concerned mortgage lenders. Since it's all done online, these generators will use filters, based on the following parameters, to be more specific about choice of leads. The parameters are credit rating, type of loan required, loan amount required, home equity, geographic location etc.



Through Internet mortgage leads any consumer could understand all about the mortgage lenders and lead generators before attempting for a business. However, there are just seven questions that the mortgage consumer is likely to encounter variations of no matter which Internet mortgage lead generator he or she chooses. The mortgage consumer will be asked to specify the state, loan type, property type, credit requirements, Loan to value ratio (LTV), loan amount and ZIP code.



The number of leads the mortgage consumer receives will be closely matching the filters he or she chooses. The more flexible the consumer is, the more leads will be sent. Note that all companies will allow mortgage consumers to change their filter preferences to better customize their leads. Certain types of possible errors can be credited to the consumer's account. For example, false email addresses and leads that turn out to be unqualified. In general, the consumer's forms will be sold to a maximum of three mortgage lenders, so the consumer can enjoy three competing offers among which to choose with a guarantee that both the mortgage consumer and the mortgage lender are treated fairly.



To maintain a healthy supply of leads to work is one of the most challenging parts of any lead generator's job. The following are the five most common problems lead generators face while generating leads and let us see how internet mortgage leads solves them.



- Uninterested prospects could be solved.

- Slow response time could be improved.

- Tedious follow up could be made easy.

- Poor return on investment could be made great.

- Unreliable supply could be controlled.



Internet mortgage lead companies are doing the marketing work for mortgage lenders.



They find prospects, and the mortgage consumers close the deals. Hence it is easier for the consumers to realize the dream of owing a home! For the lenders, it's easier to increase sales to keep profit high. Internet mortgage leads are thus a win-win situation for all!

Understanding Second Mortgages and Home Equity Loans

There are many benefits to buying a house rather than renting. Many people would argue that renting a property essentially creates ‘dead money’, in that the money for all intents and purposes vanishes into thin air. Contrary to this, those who choose to buy their own home â€" if all goes well â€" will see a gradual increase in their property’s equity over a number of years, as a result of them paying their mortgage off month by month. In some cases, the equity can rise rather rapidly if a number of factors combine forces.



If a homeowner is shrewd with their money and pays off more than they are obliged too, then not only does the mortgage decrease, but the amount they are paying on interest should decrease too, assuming interest rates don’t increase. Additionally, if an area experiences an unexpected boom, perhaps due to unforeseen development work in the neighbourhood, then this can see local house prices go through the roof, so to speak. When both the above factors occur in tandem, then the equity in a home can rise considerably in a relatively short period of time, meaning homeowners can often be sitting on mini goldmines.



Many people choose to unlock the equity in their home rather than opting to profit immediately through selling it on. The most convenient way of doing this is by going down the home remortgage route. The funds raised from this can then be reinvested back into the home, with a new conservatory, patio, garage or kitchen serving to increase the value of the home even more. Of course, any funds acquired through taking out a second mortgage don’t necessarily have to be invested back in the home â€" they can be used to buy a new car, consolidate existing loans or even go on holiday.



Second mortgages may have a fixed or variable rate of interest and will normally constitute borrowing a lump sum amount. As with a first mortgage, it will need to be paid back over a pre-established period of time. One alternative to taking out a second mortgage would be to opt for a home equity loan (HEL) instead. Similar to a second mortgage, the funds are secured against the value of the property. However, a home equity loan is perhaps more similar to a credit card in that an approved line of credit is given up to a certain amount of money.



Furthermore, it may even come with a credit card so that money can be spent against the credit. Which option is best really depends on the circumstances. For a remodel or a renovation, then a second mortgage may be the best choice, as it’s easier to have an idea of exactly how much money will be needed. In situations where the actual amount of money required isn’t clear, then a home equity loan may be the answer.

Mortgage Foreclosure Investing Not Working? Go With Tax-Delinquent Property Instead

If you're acquisitive to get your alpha in absolute acreage investing, one of the aboriginal places you apparently looked was mortgage foreclosures. You apparently contacted (or approved to, anyway) owners of backdrop who were about to lose their homes due to non-payment of their mortgage. If you were advantageous abundant to get anyone to acknowledgment the aperture or phone, you approved to bang up a accord with them to buy the acreage and accomplish some money on their equity.



Sound familiar?



This is a absolutely accepted technique, and some humans accept fabricated acceptable money using it, but it's a actual aggressive field. If you've been alive in circles aggravating to accomplish money this way, I would awful acclaim you accord a similar, but abundant added acknowledged abstraction a try - "deedgrabbing." Instead of block humans in mortgage forclosure, you'll be contacting owners of tax-delinquent property. And even if you are acknowledged in the mortgage foreclosure field, you'll wish to break acquainted for this- it'll be a abundant apparatus to add to your absolute acreage advance arsenal.



The big acumen I like alive with tax-delinquent pre-foreclosures bigger than mortgage preforeclosures is that mortgage foreclosure backdrop all accept a mortgage adjoin them! Duh! So to activate with, you're already ambidextrous with a ample debt adjoin the property- and apparently contributed taxes to boot! It’s not simple to bulk out from your mortgage account how abundant you'll in fact charge to pay off the mortgage, because there are aswell attorney's fees, interest, and added debts that aren't published.



These accuse accumulate by the day. Don't apprentice this one the harder way like I did- my aboriginal mortgage foreclosure acquirement concluded up demography DOUBLE the bulk appear to pay off!



Also, you ability be afterward dozens of leads that are appear active, but accept already accomplished a adjustment agreement. If you do appear to acquisition an buyer absorbed in alive with you, they about consistently end up not absent to advertise the acreage and allurement you to accommodation them money or bulk out addition way for them to break in the house.



Finally, and a lot of importantly, if you DO get a accord on a mortgage preforeclosure with a lot of equity, somebody (you!) is traveling to accept to appear up with all the money to accomplish the payments to stop the foreclosure. Then, while you're aggravating to accord with the accomplished mess, you're traveling to accept accumulate authoritative those mortgage payments!



The affair I hated the a lot of about mortgage pre-foreclosure investing? Everyone and their brother is aswell alive them! These poor owners accept gotten so abounding calls from added investors- not to acknowledgment all their added creditors- how was I declared to get my calls answered if they've been conditioned by months of calls and complete aggravation to abstain answering the buzz at all costs? Forget sending letters- they've abstruse to bandy those out too.



As they say, "necessity is the mother of invention." I capital to plan advance in absolute estate, so I had to acquisition a bigger way- and boy, did I! I begin a absolute acreage advance adjustment that eliminates ALL the problems with mortgage foreclosure investing-- advance in tax-delinquent property... accessible for this?... after behest at the auctions with all the added bidders! I'll get to that in a minute, but first- why tax behind property?



First of all, a lot of tax-delinquent backdrop that accomplish it all the way to the point area they're appointed to be auctioned off don’t accept a mortgage- because rather than lose their absorption in a acreage to the government, mortgage companies accept paid off the taxes on backdrop with mortgages continued ago.



So a lot of backdrop you'll acquisition are chargeless and clear! If you've been advance in mortgage foreclosures, accompany me in babble "WHOOPEE!"



Secondly, you will acquisition a abundant college allotment of backdrop at this point accept been abandoned- and these are the easiest to bound buy and re-sell. Owners are DYING to get rid of these!



Another benefit? Actual few owners will be aggravating to get you to be their lender or landlord. Whew!



With tax-delinquent properties, there are close dates at which "all is said and done.



" If the date of the bargain or the borderline to pay off the taxes comes, the buyer loses their house- period. Do you anticipate they'll wish to lose their disinterestedness to the government, or accomplish a accord with you afore then?



Last, but best of all...



Almost no one is accomplishing this. And back you save them from accident aggregate at the endure minute... owners are charmed to apprehend from you!